Starling Insights Editorial Board
Aug 01, 2022
In a speech earlier this year, Rohit Chopra, director of the US Consumer Financial Protection Bureau (CFPB), brought attention to the fact that America’s most powerful banks and credit card companies have demonstrated a pattern of misconduct. “How can we stop big firms from repeatedly violating the law?” he asked, proposing that fines may not be the answer and that regulators could begin to revoke operating licenses.
Big banks and financial institutions, like other large organizations across industries, see fines as a cost of doing business, Chopra argued. As such, other punishments will need to come into play in order to drive change and protect consumers. "We need to move away from just monetary penalties and consider an arsenal of options that really work to stop repeat offenses,” he concluded.
To avoid appearing as though they view punitive fines as a ‘cost of doing business,’ firms would do well to move beyond the ‘detect & correct’ rationale behind surveillance and to adopt proactive capabilities to ‘predict & prevent’ misconduct.
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